Mackenzie Carroll
LEX140-130A
January 22, 2024
Issue:
The main issue in Caterpillar Inc. v. Lewis was whether the federal court had proper jurisdiction following the removal of the case from state court based on diversity of citizenship, and subsequently, whether the dismissal of the plaintiff's lawsuit against Caterpillar was justified.
Rule:
Diversity at the time judgment is entered, rather than at the time of removal, is the appropriate time to examine whether complete diversity exists, permitting federal court jurisdiction.
Application:
Defendant James David Lewis, a resident of Kentucky, filed a lawsuit in Kentucky state court against Caterpillar Inc. (a Delaware corporation) and Whayne Supply Company (a Kentucky corporation) after sustaining injuries while operating a bulldozer. After entering into a settlement agreement with Whayne, Caterpillar removed the case to the Federal District Court in Kentucky, claiming diversity jurisdiction. Lewis objected to the removal, moving to remand the case to state court.
The Supreme Court emphasized that complete diversity existed when the trial commenced, as Whayne was formally dismissed, establishing federal jurisdiction at that time. The Court reasoned that remanding the case to state court after post-adjudication judgment would impose an exorbitant cost on the court system. The Court held that federal jurisdiction is permissible if the requirements are met at the time the judgment is entered.
